Severance pay must be set with equality in mind

RICHMOND, Va.—At minimum, the 4th U.S. Circuit Court of Appeal's ruling in Karla Gerner vs. County of Chesterfield, Va., should serve as a reminder to employers to treat all employees equally, observers say.

Severance packages are an issue “that employment lawyers and employers are dealing with all the time,” said Randall E. Phillips, a member of Moore & Van Allen P.L.L.C. in Charlotte, N.C.

Employees who leave voluntarily or are terminated often are given agreements to sign. “Sometimes they sign them and sometimes they don't,” so the case does not present an “unusual fact pattern,” he said.

Robin E. Shea, a partner with Constangy, Brooks & Smith L.L.P. in Winston-Salem, N.C., said the ruling tells employers “to make sure when they are offering severance packages to employees, they are consistent.”

While she noted the case against Chesterfield County still has not been proven, “it does illustrate that it's important to be consistent in what you offer people, or at least offer similarly situated employees a similar deal,” because not doing so “can be evidence of discrimination or possibly retaliation.”

Maria Greco Danaher, a shareholder with Ogletree, Deakins, Nash, Smoak & Stewart P.C. in Pittsburgh, said employers that treat employees in protected categories inconsistently are “likely to wind up” in the same spot as Chesterfield County.